The Income Tax Department has formally withdrawn its long-standing ₹8,500 crore transfer pricing case against Vodafone India Services, marking the conclusion of a decade-old tax dispute.
A Supreme Court bench led by Chief Justice BR Gavai on Monday allowed the withdrawal plea filed by the Commissioner of Income Tax, effectively closing the matter.
The case originated from the 2008 sale of Vodafone India’s Ahmedabad-based call centre business, 3 Global Services, to Hutchison Whampoa Properties (India). Following this internal restructuring, tax authorities alleged that Vodafone had transferred intangible rights and call options to a related entity—categorising it as an international transaction under India’s transfer pricing regulations.
The department sought to add ₹8,500 crore to Vodafone’s taxable income, claiming the transaction was not conducted at arm’s length. In 2014, the Income Tax Appellate Tribunal (ITAT) upheld the department’s stance.
However, Vodafone challenged the decision in the Bombay High Court, asserting that the transaction was purely domestic and outside the ambit of transfer pricing rules. In October 2015, the High Court sided with Vodafone, striking down the tax demand.
The tax department appealed to the Supreme Court in 2016, but the case saw no progress after its initial listing in 2017. With the latest withdrawal, the long-running dispute has now been officially closed.
